Record iron ore exports defy claims of mining boom ending

Updated
October 03, 2013 19:34:00

The resources sector says suggestions the mining boom is over must be dismissed, as iron ore exports from Australia hit record levels. Australian Bureau of Statistics figures show iron ore exports were worth $6.5 billion in August, a billion-dollar jump on July alone. Miners say a lower dollar and better iron ore prices have driven the growth and the mining boom's far from over.

MARK COLVIN: The resources sector is pouring cold water on claims that the mining boom is finished, as iron ore exports hit record levels.

Australian Bureau of Statistics figures show that iron ore exports were worth $6.5 billion in August, a billion-dollar jump on July alone.

Miners say a lower dollar and better iron ore prices have driven the growth and that the boom is far from over.

From Perth, Caitlyn Gribbin reports.

CAITLYN GRIBBIN: A slowdown in the resources sector has been well documented. Some have even said the combination of job losses and lower commodity prices mean the mining boom is now over.

But the latest figures show plenty of positive news.

BRUCE CAMPBELL-FRASER: The export numbers are a reflection upon the massive investment and construction that's occurred in recent years in WA. We've seen companies heavily investing in their construction projects and expansion projects, so those volumes are really starting to come to the fore now.

CAITLYN GRIBBIN: Bruce Campbell-Fraser is from WA's Chamber of Minerals and Energy. He says the latest Australian Bureau of Statistics figures reflects a healthy sector.

The bureau says Australia's iron ore exports were worth $6.5 billion in August, up a billion dollars from July and $2 billion a year earlier.

In fact, August was the most valuable month on record for iron ore exports.

Commodity analyst Peter Wright.

PETER WRIGHT: I think that it has been very overdone, commentary on the mining sector. I think it's beyond dispute that there has been a slowdown. I think it has been and it will remain a very healthy sector. It is still going to be extremely good conditions going forward and I think that's reflected for a large part of the year.

The iron ore price has held its head above that $US120 a tonne, and the exchange rate now is under 95 cents. I mean, you translate that into Australian dollars, it's an additional four or five per cent dividend.

CAITLYN GRIBBIN: What's the outlook for iron ore exports out of Australia?

PETER WRIGHT: Rio are growing volumes. BHP are reasonably steady at this stage. Fortescue are obviously growing. I think that we will see a steady increase. I don't know that we'll see ramp-ups in the order of 75, 100 per cent of volume from existing producers, but I think you'll see a steady incremental growth in volumes and I think that we're seeing that.

I think what we're seeing is a moderation but, you know, coming to a base level which is still extremely healthy and robust.

BRUCE CAMPBELL-FRASER: I think some people are misinterpreting the phase that we're in in the mining sector at the moment. We're certainly transitioning from a construction phase into an operational phase and that's where you're seeing those increased volumes come now. And with those increased volumes we'll see increased royalties and government tax receipts as well as increased shareholder returns.

CAITLYN GRIBBIN: Is it fair for anyone to say that the mining boom is over at the moment?

BRUCE CAMPBELL-FRASER: I think we'd describe that the sector's in a transition, not from boom to bust but from construction to operation. And that's why companies are in business. They're not in business to continually construct new projects, but they're in business to make sure that they can get their products to market.

CAITLYN GRIBBIN: How much positivity is there still?

BRUCE CAMPBELL-FRASER: I think it's not without its challenges. The major challenge in Western Australia is trying to get our costs under control. We're a very expensive place to do business and I think that's a major focus for all the companies at the moment.